I think this happens when there's a : in the name of a target, e.g. if you're specifying absolute paths with drive letters on Windows. Do you have any paths like that in your Makefile? Can you post the full text of the error?
My guess is that the makefile copy-paste has destroyed the tabs which are special to make. The error line in the makefile refers to ISPFUSES which does have colons.
Can you tell me how to download rather than copy-paste files from Berlios (or somewhere else)?
The original output of make is shown below. I used the full path just to prove that the WinAVR version of make is being used although just using 'make' has the same result.